The Nickel Report

On September 20, 2018, the Federal Energy Regulatory Commission (FERC or Commission) held its September 2018 open meeting. This meeting did not include Chairman McIntyre, who is recovering from surgery. Commissioner Chatterjee assumed the gavel on his behalf for the meeting.

Highlights of the meeting include the following:

• The Commissioners heard from James Danly, FERC General Counsel, and Howard Elliott, Administrator for the US Department of Transportation’s (USDOT) Pipeline and Hazardous Materials Safety Administration (PHMSA), regarding the memorandum of understanding (MOU) between FERC and PHMSA. The MOU outlines the process that FERC and PHMSA will use to coordinate their efforts to expedite the review of applications for LNG projects. Mr. Danly noted that under the MOU, PHMSA will now make the preliminary determination of whether a proposed LNG project meets USDOT standards and certify it to the Commission. He stated that this determination was made previously by FERC, but, given the number and complexity of proposed LNG projects, FERC had to rely on PHMSA expertise to assist with its determination. This resulted in duplicative work and prolonged the review of LNG project applications. According to Mr. Danly, the MOU “will greatly shorten the review process time.” The Commissioners each stated their support for the MOU. Commissioner Chartterjee re-iterated his support for out-of-the box thinking to make reviews of LNG export facility applications more efficient without compromising safety. Commissioners LaFleur and Glick emphasized that the Commission will still need to fulfill their obligations under the Natural Gas Act.
• Commissioner Chatterjee also took a moment to discuss his dissent from the majority’s decision to deny the Utah Board of Water Resources’ petition for declaratory order regarding the Commission’s jurisdiction with respect to certain facilities associated with the Lake Powell Pipeline Project, EL18-56. He argued that the Federal Power Act and Commission precedent gives the Commission wide discretion in determining what constitutes a hydro-electric project and thus what is under the Commission’s jurisdiction.
• Additionally, Commissioner Glick highlighted the first ever triggering of ISO-New England’s “pay for performance” event, which provides resources incentives to perform during capacity scarcity conditions. He noted that the Commission should focus on developing market rules such as these where resources are compensated for the services they provide, which will be essential to incentivizing the resource mix needed to operate the grid in the future.
• Finally, Commissioner LaFleur described her trip to the Alaska for the National Hydro Association regional meeting, noting that climate change is a current reality in Alaska that is having a big impact on the population there.